Karen Uhlenhuth – Midwest Energy Newshttp://midwestenergynews.com
Covering the Midwest's transition to a clean energy economyThu, 17 Aug 2017 14:39:07 +0000en-UShourly1https://wordpress.org/?v=4.8http://midwestenergynews.com/wp-content/uploads/sites/64/2017/05/MWEN_Twitter-60x60.jpgKaren Uhlenhuth – Midwest Energy Newshttp://midwestenergynews.com
3232Missouri regulators, ‘unable to act in public interest,’ deal Grain Belt Express another setbackhttp://midwestenergynews.com/2017/08/16/missouri-regulators-unable-to-act-in-public-interest-deal-grain-belt-express-another-setback/
Thu, 17 Aug 2017 01:59:00 +0000https://midwestenergynews.com/?p=450265Even though four of its five members stated unequivocally that a proposed wind energy transmission line would be in the public interest, the Missouri Public Service Commission on Wednesday said it could not grant Clean Line Energy Partners a permit for development of the Grain Belt Express.

The commission said it was constrained by a recent state appeals court ruling in a different transmission case.

‘Because of this legal quagmire, the project can’t move forward’

A lawyer representing clean-energy interests said that another appeal is a near-certainty. Mark Lawlor, Clean Line’s vice president for development, wasn’t quite as definite.

“I think it’s sort of placed the burden on Clean Line to go ask the courts to sort this out,” he said. “Because of this legal quagmire, the project can’t move forward. It’s a broken system. It’s a problem for Missouri.”

Dispute over interpretation of law

This was the commission’s second outright rejection of the project, which would carry about 4,000 megawatts of wind energy from western Kansas to Missouri and points east. Further development of the substantial wind resources in the Great Plains depends on more transmission capacity to carry the energy to large concentrations of customers hundreds of miles away. The 780-mile line would have crossed Missouri and Illinois and terminated near Indiana’s western border.

Four of the commission’s five members made clear in a concurring opinion that they see value in the proposed project. They cited some benefits it would provide: the lowest-cost resource available, and savings to customers along the route who were going to receive some of the power. It’s estimated that Missouri customers receiving Clean Line’s wind energy would save about $10 million annually on their electricity bills. About three dozen utilities across the state have committed to purchasing about 100 megawatts.

And yet, the commissioners wrote, “Unfortunately, because of the structure of this Commission and the legal structure in this state we were unable to act in the public interest.”

That essentially gives one county commission authority that supercedes that of a state government and the federal government, said James Owen, executive director of Renew Missouri. And that, he claims, is a misreading of the state law.

“When I read that statute, it says to me that counties need to be giving their approval to the fact that, ‘When power lines go over our roads, that is structurally sound and will keep our streets passable.’

“It’s not as though the county commissions can have this arbitrary veto authority.”

After the Public Service Commission made that ruling previously, the state appeals court affirmed it, and then the state Supreme Court declined to rule on the interpretation of the law.

“I’d say all of those people bear some responsibility for what’s happened here,” Owen said. When it was deliberating the decision it formally made on Monday, the commission asked for legal briefs “on whether they should follow that case. We worked on a brief … we were very clear that they should not.”

‘David and Goliath’

Those opposed to the project are, in a word, “ecstatic.”

Speaking for landowners along the route, Jennifer Gatrel said, “For us, it’s been four years of constant work and worry. It’s been a very David and Goliath type of battle. We have in every possible way told them ‘No.’ They have treated the landowners terribly. We will never willingly do business with them. We are hoping that they understand that farmers think in the long term, and we will fight this battle as long as we have to, to preserve our property rights.

“We are hoping the nightmare will finally be over.”

That is not likely. Lawlor said there are a few options that he and his staff are evaluating. One is to essentially take the case back to the state appeals court – the same body that took the position that in part has led to this “quagmire,” as Lawlor called it.

There is actually a chance that the same court that ruled against Clean Line’s interests could see things differently, according to Renew Missouri’s James Owen.

“There are aspects of this that haven’t been presented before,” he said. “We can point out things that haven’t been thought about.”

The legislature is another avenue, according to Lawlor. He suggested they might want to study the pertinent law and ask themselves, “Is this what we meant to do here? Is this what we want, to have county commissions decide which infrastructure moves forward in the state?

“It would be in legislature’s interests to sort this out.”

There is also a federal avenue through which Lawlor said private developers can partner with the Department of Energy to develop infrastructure.

But Lawlor claims that the issue goes beyond Clean Line’s desire to build a high-voltage transmission line across Missouri. The new administration of Gov. Eric Greitens “has made a point of saying, ‘Missouri is open for business, we want investment in our state.’

“This decision runs counter to that.” As it now stands, he predicted that, “Other investors are going to look at Missouri and this will enter into their decision as to whether this is a good place to invest money.”

]]>Iowa utility offers high ‘green’ pricing without adding renewableshttp://midwestenergynews.com/2017/08/14/iowa-utility-offers-high-green-pricing-without-adding-renewables/
http://midwestenergynews.com/2017/08/14/iowa-utility-offers-high-green-pricing-without-adding-renewables/#respondMon, 14 Aug 2017 11:00:00 +0000https://midwestenergynews.com/?p=447201An Iowa electric utility has proposed a green pricing option that ultimately could cost a customer more than investing in a rooftop solar system, according to the analysis of some clean-energy supporters in the state.

Critics also expressed doubts as to whether Alliant Energy’s green pricing option, known as Beyond Solar, would lead to the development of new renewable energy in the state.

Advocates say it looks like the option, now pending before the Iowa Utilities Board, will simply tap into wind and solar resources that Alliant Energy already owns. That would defeat the purpose of green pricing, critics add, and apparently would not follow the “spirit and intent” of a law that requires utilities to offer green pricing, or a premium for renewable energy.

“While it might not technically violate the rules, it certainly violates the spirit and intent of those rules,” said Josh Mandelbaum, a staff attorney based in Iowa for the Environmental Law & Policy Center.

“The way this program is set up, the same amount of renewable energy is going to be on the grid whether no one participates in the program or 1,000 people participate,” Mandelbaum continued.

The reason, he said, is because Alliant Energy proposes to provide Beyond Solar subscribers with energy from two existing sources of generation — a power-purchase agreement with an Iowa wind farm and a 5-megawatt (MW) solar array that Alliant just built in Dubuque.

‘Incredibly high premium’

Mandelbaum also said the new choices offered by Beyond Solar come with an “incredibly high premium” that would approximately double a customer’s power bill.

Three Beyond Solar options are available: 100 percent solar, a 50/50 split of solar and wind, and 25 percent solar with 75 percent wind. In each scenario, generation capacity is sold in increments of 1 kilowatt and is added to a customer’s existing bill. The cost per kilowatt is $13.61 for 100 percent solar, $6.70 for 50 percent solar and $3.24 for 25 percent solar.

A typical residential customer choosing to go 100 percent solar would need to buy 5 kilowatts a month, incurring a roughly $68 monthly fee. That basically would double the cost of electricity, according to Mandelbaum.

Beyond Solar would be in addition to a green-pricing option that Alliant introduced in 2001. Known as Second Nature, it offers the option of renewable power derived mostly from wind for an additional 2 cents per kilowatt hour. Mandelbaum says it is much less costly than power purchased through Beyond Solar.

Foss said Alliant developed Beyond Solar to satisfy customers who have been requesting green-pricing alternatives to Second Nature.

“Second Nature really involves a lot of wind energy,” Foss said. “There’s a miniscule amount of solar in there. Beyond Solar would involve mostly solar. We find there are a couple types of customers: Some customers want low-cost renewable energy, or just renewable energy in general. Some customers really just want solar energy. So we are trying to create different options.”

The two programs, he added, “are not designed to compete against each other.”

Adding renewables

While tapping into an existing source of solar energy is fundamentally different from investing in additional solar generation, Foss said, “It’s difficult to create a new program if there are no existing assets. It’s hard to say to a customer, ‘Sign up now and I’ll give (power) to you in two years, once we purchase the land and move forward on that.’”

Mandelbaum countered that other utilities — such as the city electric provider in Cedar Falls, Iowa — have done just that.

Alliant proposes launching Beyond Solar on November 1 while continuing to offer Second Nature. Jennifer Easler, an attorney with Iowa’s Office of Consumer Advocate, said she’s concerned that Alliant might be more aggressive in marketing the more-costly Beyond Solar to customers who are unaware of what they’re getting.

“They’re paying a premium for existing resources,” she said, adding that “there’s not a direct commitment” to invest in more renewable resources. Even if Beyond Solar attracts a lot of customers, she said, the recently completed 5-MW array in Dubuque has “quite a bit of room … for expansion.”

On the wind side, Beyond Solar will meet customer demand with generation from the Hancock wind farm, which it may no longer use for Second Nature customers because it is too old and no longer meets the certification requirements of Green-e, a clean-energy certifier.

“Cynical” is how Mandelbaum characterized Alliant’s proposal to sell uncertified wind energy and existing solar energy with the suggestion that customers would be paying a hefty premium to develop new renewable resources. He said Alliant envisions reserving all of the benefits of renewable power for itself, and leaving customers with no long-term benefits from renewable energy — just a higher bill.

If Alliant wanted to move renewable energy along, Mandelbaum suggested it could devise a community renewable program.

“It’s something we’ve had many conversations about, but we’re not there,” he said. “A community renewable program, at least one that meets best practices, adds renewables and allows customers to benefit. It would accomplish several things that this does not.”

]]>http://midwestenergynews.com/2017/08/14/iowa-utility-offers-high-green-pricing-without-adding-renewables/feed/0To solve ‘duck curve,’ Missouri utility to pay bonus for west-facing solar panelshttp://midwestenergynews.com/2017/08/03/to-solve-duck-curve-missouri-utility-to-pay-bonus-for-west-facing-solar-panels/
Thu, 03 Aug 2017 11:00:00 +0000https://midwestenergynews.com/?p=442313In an effort to better align solar-energy production with peak demand, the electric utility in Columbia, Missouri has begun to pay higher rebates for new west-facing arrays than it will for those facing south.

The city-owned utility adjusted its rebates as of Aug. 1 in order to encourage more solar production in late afternoon, when electricity use tends to peak, especially during the high-demand summer months.

“To date, most systems that have been installed have maximized benefits to the customer,” said Ryan Williams, Columbia’s assistant director of water and light. “The goal is to shift the market so it would increase benefits to the utility.”

The duck curve

Columbia Water & Light appears to be one of very few utilities to tackle the “duck curve,” the tendency of solar arrays to reach maximum production in the middle of the day, a few hours before demand peaks. Two years ago, the California Energy Commission ruled that new west-facing solar installations could qualify for as much as a $500 bonus.

In Texas, Austin Power “has talked about it as a possible future rate structure,” said the utility’s solar manager, Danielle Murray. “It’s forward thinking. If we did utility-owned solar, on customers’ roofs, we might focus on west-facing panels.”

The high cost of purchasing power to meet peak demand means that power produced locally at peak times “has much higher value” than power produced before the demand peak, Murray said. Late-afternoon solar energy “helps to reduce the overall system cost. You may not get the most kilowatt hours, but you get higher economic value out of it.”

The Alliance for Solar Choice tried to quantify that difference in Arizona, and determined that south-facing panels provide benefits of 15.5 cents per kilowatt hour, while west-facing panels generate 21.8 cents in benefits per kilowatt hour.

Utilities often voice objections to paying solar customers to produce energy at times when it is not needed on the grid. Columbia’s tactic, although it likely will reduce new production overall, will shift it to a time when the grid needs to supply more power.

Aside from some utilities in solar-heavy California and Hawaii, “I haven’t heard of any locations incenting that type of thing,” said Josh Rhodes, a research fellow at the Webber Energy Group and the Energy Institute at the University of Texas in Austin. “I’ve heard of people who won’t pay if you put panels on a north- or east-facing roof.”

In markets with smart meters, he observed, more west-facing solar production could be accomplished through time-of-use pricing that pays a premium in the late afternoon or other times when more power is needed.

“In most locations where PV adoption has been low, maybe it doesn’t matter as much. As more and more PV gets on the grid, it matters more and more. At some point, it might matter a whole bunch and you might see these incentives come about. Some forward-thinking utilities might want to get their rebates in line.”

‘Minimal’ impact to the market

Before the change, Columbia systems of up to 10 kilowatts could earn a rebate of $500 per kilowatt, regardless of the panel’s azimuth, or the direction it’s facing.

Under the new regimen, panels facing between 180 and 200 degrees – that is between south to slightly southwest of that – will continue to receive $500 per kilowatt. Panels facing between 200 and 320 degrees – southwest to west – will qualify for a 25 percent bonus, or an additional $125 per kilowatt. Panels facing between 110 and 180 will receive 25 percent less, or a total of $375 per kilowatt.

Panels outside the range from 110 to 320 degrees and at a tilt of more than 10 degrees from horizontal will receive no rebate, although they would continue to qualify for net metering.

Larger installations also qualify for rebates under the new system, with a bonus for panels facing west and a discount for panels with an easterly orientation. The payment per kilowatt is less than for smaller systems.

The utility is not changing the rate it pays for excess power from solar arrays. It will continue to pay retail for that power, regardless of when it’s produced, according to Eric Hempel, Columbia’s energy educator.

“The important thing to note there is that it’s less than 10 percent of all systems currently on the network” that fall into the zone that would be affected by the new rebate system, Hempel said. “So the impact to the market we feel will be minimal.”

Too soon?

Installers are not all enthusiastic about the change.

Caleb Arthur, chief executive officer of Missouri Sun Solar and president of the Missouri Solar Energy Industry Association, said he thinks the revamped rebates are premature, given that rooftop solar accounts for only about one-third of a percent of the city’s total generation. Also, he said that west-facing solar panels would have to grow significantly before they would make any dent in peak power demand.

The new rebate structure is more nuanced and will, he said, “make confusion for installers and customers.” He’s also concerned that the new rebate system may discourage people from investing in solar.

“I don’t want to see a message to people that, ‘You don’t have enough roof to do solar.’”

Although he supports the increased rebate for west-facing panels, Authur said he’s concerned that reducing the rebate for other panels might discourage potential customers.

But Hempel says this is just the start of an experiment aimed at creating a cheaper source of capacity, which is likely to become more costly in the larger energy marketplace.

“We are using this as a first step to see how the market responds.”

]]>Grain Belt Express transmission line has another shot at approval from Missouri regulatorshttp://midwestenergynews.com/2017/07/07/grain-belt-express-transmission-line-has-another-shot-at-approval-from-missouri-regulators/
Fri, 07 Jul 2017 10:59:00 +0000https://midwestenergynews.com/?p=426880Developers of a wind energy transmission line have another shot at gaining the regulatory approval they need in Missouri, a state where the project has faced strong opposition.

The Missouri Public Service Commission last month said it would not rule on whether to grant Clean Line Energy’s application to run Grain Belt Express transmission line across Missouri until litigation involving a different transmission project was resolved. Clean Line had predicted that the delay might effectively kill the project.

However, now that that case has been clarified, the Public Service Commission said it will give supporters and opponents of the project a chance to make their cases in a hearing scheduled for Aug. 3.

The Grain Belt Express is a 4,000-megawatt overhead transmission line that would span about 780 miles, from western Kansas to the Illinois-Indiana border. Faced with opposition in the eight Missouri counties it would cross, the developer agreed to provide about 200 megawatts of power to a collection of 67 municipal utilities in Missouri.

While the opposing sides in the matter agree that Clean Line must obtain both permission from the eight counties and a permit known as a certificate of convenience and necessity from state regulators, they disagree on the sequence in which they must be obtained: Clean Line says it can obtain the state certificate first, while opponents maintain that the developer must first get assent from the eight county commissions.

In a brief filed on Thursday, the commission staff took the position that Clean Line must obtain county consent before it can seek a certificate from the commission. The staff contends that the Grain Belt project is very analogous to the Mark Twain project, and so should be treated the same way – by requiring that it obtain county approvals first.

“The reason it matters so much to Clean Line is they’d like to use PSC authority as a lever against the county commissions,” said Jennifer Gatrel, spokeswoman for Block Grain Belt Express-Missouri. “If Clean Line were allowed to have that lever to use against the county commissions, it would unfairly burden the commissions and the landowners.”

The public service commission postponed acting on the Grain Belt application while it awaited a Missouri Supreme Court decision about Ameren’s application for a certificate allowing it to build a transmission line dubbed the Mark Twain. The state Supreme Court allowed to stand a ruling by the Missouri Court of Appeals that found that Ameren could not pursue a certificate of necessity from the commission until it had in hand approvals from the commissioners in all eight counties that the project traverses.

Mark Lawlor, director of development for Clean Line, doesn’t believe that the standard applied in the case of Ameren’s project is pertinent to the Grain Belt Express.

“We’re saying these are two different things, with entirely different standards,” he said. He contends that the standards debated in the Mark Twain project apply to utilities seeking permission to provide service on a retail basis, and are not relevant to a merchant developer of transmission, like Clean Line.

The two standards “have gotten conflated into one confusing mess,” he said.

To require approval from the county commissions before state regulators essentially shifts the bulk of the power from a state agency to a county authority, as Lawlor sees it.

“You’ve subjugated the public service commission to a county authority,” he said. “There’s a lot of public policy implications. They have leverage to stop infrastructure projects they don’t like.”

Editor’s note: this story has been updated to include comments of the staff of the Missouri Public Service Commission.

The commission will hear from proponents and opponents beginning today in a proceeding involving Westar Energy.

Westar initially requested permission to levy a surcharge on solar customers as part of a rate case a couple years ago. The commissioners declined to rule on that request, and said in early 2016 that they wanted to consider more broadly the design of rates for distributed-generation customers in a separate proceeding. That is now underway.

Westar contends — as have utilities across the country — that as solar customers reduce the power they purchase, they no longer pay their share of a utility’s fixed costs.

In filings with the Kansas Corporation Commission (KCC), Westar claimed that only 26 percent of its expenses vary with the level of demand on its system, while 91 percent of bill revenues vary with the amount of power customers use. The result, according to Westar, is that payments from solar customers fall much more than the costs they impose on the system, leading to a cross-subsidization.

Solar proponents question the actual impact to date, however, given that Westar’s roughly 615 customers with distributed generation account for about one-tenth of 1 percent of all of its customers.

Surcharge ‘premature’

Rick Gilliam, a program director for Vote Solar, has been working with a clean-energy group in Kansas on the distributed generation docket. He called it “premature” for the commission to even consider an additional fee on solar customers given the tiny numbers of them. He maintains that other states where he’s worked generally have not started looking at a surcharge until solar generators amounted to at least 2 or 3 percent of all customers.

Also, according to Gilliam, the demand charge that Westar wants to impose on solar generators would mean that “one 15-minute period during the month will drive 70 percent of a (solar) customer’s total monthly bill. Even if there was a problem with the impact of distributed-generation customers, the rate design proposed by Westar doesn’t solve the problem, it just kills the industry.”

Lawrence, Kansas-based solar installer Cromwell Environmental “ran the numbers on some customers,” said the company’s research and project analyst Scott White. “It’ll mean their bills will be higher than they were before they had solar.”

Westar has proposed a fee of $10 per kilowatt of demand in the summer months and $3 per kilowatt of demand in the winter, in addition to the standard fixed fee of $14.50 per month. Solar customers would see a moderately lower energy charge.

Although the current discussion stems from a request made by Westar, the state’s largest utility, a commission ruling would allow any of the state’s regulated utilities to impose a demand charge on customers with solar panels, with one exception. Westar customers who installed a solar array before Oct. 28, 2015 would be exempt from a new demand charge because regulators reportedly have already established a separate category for them.

Costs, benefits to the grid

Ahmad Faruqui, an energy economist and principal with The Brattle Group, submitted testimony on behalf of Westar. He said a demand fee is reasonable because “while a customer reduces his/her total energy needs by installing rooftop PV system, the customer still requires nearly the same amount of power grid infrastructure.”

And even if a distributed generation customer’s net annual energy consumption were zero, he wrote, “he/she still has significant demand during those system peak hours that drive the need for investments in infrastructure that are necessary to maintain a sufficient level of reliability.”

Solar advocates in Kansas contend that no one knows the extent to which solar systems burden or support the grid in Kansas. In the absence of such data, they maintain there’s no justification for changing the rate.

Dorothy Barnett, executive director of the Climate & Energy Project in Kansas, said an analysis of the costs and benefits of solar to the grid “was the main thing we asked for.” Commission staff told her it’s too costly and too time-consuming. She claims it would require about $100,000 and six months.

At least a dozen value-of-solar studies have been completed in states across the country. For the most part, those funded by utilities have found solar customers to be costly to the grid, while those funded by other parties have in most cases concluded that solar systems aid the grid. Elsewhere, regulators in Michigan, for example, are studying distributed generation’s costs and benefits to the grid as required under new energy laws that took effect in April.

In Kansas, Gilliam said, “There’s not enough information to evaluate whether statements made in the settlement agreement are valid. That’s what this hearing is about.”

“We’ll be arguing that a study needs to come out of this,” said Cromwell Environmental’s Scott White.

After negotiations among interested parties failed to attain broad unanimous agreement, the entities that did agree — utilities and the commission staff — signed a settlement agreement.

Gilliam, who did not sign the agreement, said: “We don’t think any of the parties that signed the agreement made the case with data that we need to have a separate rate class, that the current two-part rate system is a problem, or that with less than 700 customers across state, there is any significant cross-subsidization happening.”

]]>http://midwestenergynews.com/2017/06/27/as-kansas-utility-pursues-surcharge-on-solar-customers-advocates-want-more-data/feed/6Kansas regulators reject most of utility’s energy efficiency proposalhttp://midwestenergynews.com/2017/06/27/kansas-regulators-reject-most-of-utilitys-energy-efficiency-proposal/
Tue, 27 Jun 2017 10:59:00 +0000https://midwestenergynews.com/?p=420521In Kansas, which ranks 48th in the nation for its lack of energy efficiency incentives, regulators have rejected most parts of a utility proposal to establish a set of efficiency benefits for its customers.

Kansas City Power & Light (KCP&L) wanted to create a set of benefits in Kansas very similar to those it offers its customers on the Missouri side of the Kansas City metropolitan area. However, the Kansas Corporation Commission ruled on Thursday that most of the rebates and other benefits did not justify their cost.

A few components of the proposal did survive, including an energy-efficiency education program as well as efficiency benefits targeted toward low-income residents. Those initiatives aren’t required to meet the cost-benefit test that is applied to other parts of the utility’s proposal. The commission also determined that a lighting incentive would deliver benefits exceeding its cost, as well as two programs for business customers. Those are a demand-response incentive and a standard efficiency rebate.

However, those successes were small consolation to Dorothy Barnett, who advocated for the efficiency program on behalf of the Climate & Energy Project in Kansas.

KCP&L made clear that it was offering a web of interconnected programs, “kind of an all-or-nothing thing,” Barnett said. “I’d be surprised if they opt to go ahead with the low-income or education without the other programs included. We’d like to talk about what the next steps are. There were more than 1,000 comments supporting energy efficiency on the Kansas side, so we were very disappointed that the commission isn’t allowing that.”

A KCP&L spokesperson did not indicate how the utility will proceed, but said in an email: “We are currently reviewing the order issued by the Kansas Corporation Commission last week and are pleased to have been a part of furthering the policy discussion around energy efficiency in Kansas. We thank the KCC and other involved groups for participating in this important conversation over the last year.”

First attempt

This is the first utility attempt to create an energy efficiency program since the legislature passed the Kansas Energy Efficiency Investment Act in 2014. The law allows utilities to be reimbursed and to earn some profit on funds spent on customer efficiency programs.

KCP&L had offered some experimental efficiency benefits prior to the bill’s passage, but allowed them to lapse. The utility essentially was attempting to replace that program with benefits conceived under the 2014 law, Barnett said.

The proposal “was based on programs that have been running in Missouri for four years. It’s not pie-in-the-sky. They’ve been doing them quite well in Missouri. Customers are satisfied, the commission is satisfied, the consumer advocate seems to be satisfied. They invested even more money in energy efficiency on the second round.”

The commission’s rejection was based in part on its assessment of the proper way to calculate how much expense the utility could avoid through reduced electricity sales. Also, the commission and the Citizens Utility Ratepayer Board disagreed with the utility about what tool to use in approximating the useful life and savings for specific energy efficiency measures. KCP&L used a “technical resource manual,” while the commission and the ratepayer board maintained that the California Database for Energy Efficiency Resources is the more accurate source.

The ratepayer board advised the commission not to approve the efficiency plan.

Although KCP&L was asking to institute a program in Kansas that is very similar to its program in Missouri, the regulatory response in the two states was quite different — an outcome that surprised Barnett.

“KCP&L is very specific that it wants to do the same thing in Kansas that it’s doing in Missouri,” she said. “All the numbers for what the programs cost, what they’ll save, for how long the avoided generation will be — those were the same as in the Missouri filings.”

KCP&L has 15 days from June 22 to ask the commissioners to reconsider their decision. If last week’s decision stands, Barnett said she may try to address the language of the Energy Efficiency Investment Act in the legislature next year.

“I think there are several pieces that may need to be looked at,” she said. “Parts of the law are ambiguous. It could be interpreted however you wanted. If you’re inclined to approve energy-efficiency programs, you could use that law to justify it. If you’re inclined not to approve energy efficiency programs, you can point to the law that says we may do this.

“It’s something we’ll be be taking another look at to see if that’s where the issue was.”

]]>Decorah, Iowa is latest town to consider parting ways with its utilityhttp://midwestenergynews.com/2017/06/21/decorah-iowa-is-latest-town-to-consider-parting-ways-with-its-utility/
http://midwestenergynews.com/2017/06/21/decorah-iowa-is-latest-town-to-consider-parting-ways-with-its-utility/#commentsWed, 21 Jun 2017 11:00:00 +0000https://midwestenergynews.com/?p=414509An effort is underway in a small Iowa city to create a municipal electric utility that would supplant the service now supplied by Alliant Energy, an investor-owned utility — the latest in a series of similar efforts around the country.

Although the leaders of the initiative acknowledge that it’s a daunting challenge, they believe a locally owned electric utility would provide substantial benefits to the city of Decorah.

One of those is more renewable energy. Several attempts to develop renewable energy in Decorah have run up against policies of Alliant. Luther College, the largest electricity customer in Decorah, had to abandon a couple of renewable projects because Alliant said they could not be done.

Another project that encountered resistance from Alliant envisioned five large Decorah institutions generating and sharing solar power: Luther College, Northeast Iowa Community College, the city and county governments, and the Decorah hospital. The project could only proceed with the assistance and cooperation of Alliant Energy.

“Alliant said, ‘We’re not interested,’” said Andy Johnson, director of the Winneshiek Energy District, which played a large role in the project.

The new policy, recently approved by the Iowa Utilities Board, is an experimental three-year tariff that applies to customers with distributed generation installed as of early May. Because of the new way that the tariff calculates a net metering cap, many clean-energy proponents worry it will make the economics of solar energy much less attractive and may discourage new solar installations.

Jon Jensen, who directs the Center for Sustainable Communities at Luther College, believes that a locally-owned non-profit utility could turn that around.

“We hope a municipal utility might let us do more experiments with renewable energy,” he said.

It would provide other benefits, as Johnson and others see it. With local ownership, utility payments that now go to Alliant headquarters in Madison, Wisconsin would stay in Decorah, observed Larry Grimstad, a retired banker and the chairman of the board of recently formed Decorah Power. He claims that a local public utility would function just like a new business – a rather large business with a very reliable customer base.

That type of local investing, he said, is “going to be one of those saviors for small communities.”

Grimstad and others decided the time was ripe for exploring the creation of a municipal utility because Decorah’s 25-year contract committing it to buy power from Alliant will expire in May 2018. State law allows for the creation of a municipal utility, and the Iowa Utilities Board ultimately would rule on the matter.

‘The road is long and hard’

Similar attempts have been made in several other communities with varying results. About 20 municipal utilities nationwide have been created since the year 2000, according to Tobias Sellier of the American Public Power Association. The largest of those was Jefferson County, Washington, he said, with 18,000 customers. In 2013, it took over the system from Puget Sound Energy.

Boulder, Colorado is still in the process of trying to create a municipal utility. Minneapolis abandoned its effort to go municipal in 2014 after the two utilities that provide the city with electricity and natural gas agreed to a “clean energy partnership.”

“The road is long and hard,” Sellier wrote in an e-mail. “As you’d imagine, few investor-owned utilities are quick to give up their service territory. The path to municipalization requires a dedicated community that is willing to spend the funds to conduct feasibility studies – and usually an organized grassroots campaign.”

The Decorah effort now is focused on raising money to pay for a feasibility study, which is projected to cost about $60,000 to $70,000. The proponents issued a request for proposals and selected a consultant to appraise the value of the assets such as substations and lines and poles, and to analyze the power supply, the finances and operations and maintenance. Johnson said he hopes the feasibility study will get underway later this summer.

If the numbers look promising, he said, a citywide referendum likely will be the next step. If a referendum indicates a sufficiently high level of support for a local utility, the City of Decorah likely would assume management of the project at that point.

The city already has indicated some support. At a March meeting, the city council unanimously approved of Decorah Power conducting a feasibility study on behalf of the city, funded through donations. By a 5 to 1 vote, it put a moratorium through the end of 2017 on on renewing its franchise agreement with Alliant.

The city would need to file an application with the Iowa Utilities Board, which would make a ruling on the matter.

Proponents of a local utility expect resistance from Alliant. They’ve gotten some. Decorah Power asked Alliant for some information that is integral to the feasibility study, figures about power sales to classes of customers, and a list of equipment and other property within Decorah. Alliant said that is proprietary information and refused to share it, according to Johnson.

He said the information can be obtained from another source, but will increase the cost of the feasibility study.

“No business is going to want a branch of their operation to be taken away from them,” Grimstad said. “Obviously they will put up every roadblock, but we’re saying, ‘Let’s proceed and see where it goes.’”

Alliant spokesman Mike Wagner said in an e-mail that although Alliant could not provide the information “due to confidentiality reasons, we did offer to provide similar information through a third party.

“Our goal is to provide customers the safe, reliable and affordable energy they have come to expect. In talking with our customers in Decorah, we’ve heard from many customers who appreciate what we do and our commitment to the community. We’ve also heard from many customers who appreciate the programs we offer, such as rebates to encourage energy efficiency.

“We look forward to continuing to find ways to advance clean energy and find new energy solutions in every community we are privileged to serve.”

In the end, it will be the residents of Decorah who will decide the future of the initiative.

“The ultimate question we have to answer in Iowa is, ‘What’s in the best interest of the public?’” Grimstad said. “If we can’t establish that this is in the best interests of the public, we won’t be able to get it approved by IUB.”

]]>http://midwestenergynews.com/2017/06/21/decorah-iowa-is-latest-town-to-consider-parting-ways-with-its-utility/feed/6Advocates say state regulators moving too slowly on grid modernizationhttp://midwestenergynews.com/2017/06/08/advocates-say-state-regulators-moving-too-slowly-on-grid-modernization/
Thu, 08 Jun 2017 11:00:00 +0000https://midwestenergynews.com/?p=405370State and federal regulators call many of the shots in the utility world, and some advocates say they should use that power to press for faster modernization of the electrical grid.

“Traditionally, regulators have been in reactive mode,” said Dan Delurey, president of the Wedgemere consulting group and author of a newsletter about demand response and the grid. “They’ve waited for utilities to make proposals, then have ruled yea or nay on them.”

Yet, he said, regulators in a few states “have taken it upon themselves to go in different directions, and to be more of a leader on policy.” He mentioned Massachusetts, New York and California as examples of states that have issued far-reaching directives for the utilities they regulate.

California’s commission, for example, issued a requirement in 2013 that the state’s three investor-owned utilities invest in 1,325 MW of energy storage by 2020.

Delurey also commended Minnesota’s commission for being “pretty far out front on community solar, and trying to figure out how to compensate that, and what is the value of solar. They’re moving the ball and setting up for the future.”

He has hopes that Ohio’s commission may step up as well under the leadership of the new chairman, Asim Z. Haque. Although it hasn’t been in forefront of policies encouraging grid modernization, Delurey said, “Asim Haque, with a green light from the governor, is saying, ‘We’ve got to do this.’ He’s not trying to attack it piecemeal in a reactive way, but has issued a proceeding to see what the commission has to do to enable a smart grid.”

‘It’s too slow’

But many more state commissions decline to push their regulated utilities to invest in grid modernization.

A few years ago Kansas City Power & Light began investing in a network of electric-vehicle charging stations in the Kansas City metro area, which encompasses parts of both Missouri and Kansas. When the utility sought to include the cost in its rate base, which would allow it to recoup the costs and earn some profit on the investment, commissions in both states refused to permit it. The utility stopped developing the network in Kansas as a result.

“That’s a perfect example of trying to modernize the system with new distributed resources and with mobile storage and time-based charging,” Delurey said.

Views certainly differ as to whether the Missouri and Kansas commissions made the correct ruling, but the issue illustrates the challenges that confront many utilities that wish to modify the current business model – in this case to compensate for flat or declining electricity revenues by encouraging the conversion of transportation from gasoline to electricity.

“Utilities don’t have enough incentive,” said Steve Kihm, who has written recently on the topic. He’s the chief economist for SeventhWave, a mission-driven policy think tank. “The utilities have been moving in these directions. The general idea is that it’s too slow.”

Not only are there insufficient enticements, he said, but there are disincentives that may seem punitive to a utility trying to break out of the box. Remaking the grid can be a high-risk endeavor, and utilities have to prove their investments are “prudent” to have a shot at recovering their investment.

Technology is moving ahead rapidly, Kihm said, and if a trial with a new technology fails, the utility “might be criticized” by regulators and others. Consequently, many utilities feel “its just too dicey” to try something new.

So, for example, if a substation requires replacing, he said a utility might be inclined to take the safe route – replacing the existing substation with something similar – instead of taking the innovative but risky route – installing a smaller substation supplemented by some sort of demand response.

“There may be a tendency to stick with something known,” he said.

Contrasting with the rapid development of new technology is the deliberate and measured approach of most regulatory commissions, according to Delurey.

“The regulatory model is a slow one,” he said. “It’s not even like legislation. It’s a different type of government policy model and is meant to be adjudicatory. When you have technology being introduced so fast, it’s hard for the regulatory model to keep pace.

“Some argue that’s a good thing, that you want this measured process that doesn’t react too fast. But I’d argue it’s not fast enough.”

‘The ball is in their court’

The regulatory process is, by design, in part about protecting customers, Delurey observed. He recalled one case in which “the consumer advocates were actually – I don’t want to use the word ‘barrier’ – but in one sense they slowed down the introduction of advanced meters. The advocacy community was making statements about what technology the customers wanted and didn’t want. The job of the state consumer advocate is to make sure the proposals from utilities are fair to consumers.”

Janice Beecher, director of the Institute of Public Utilities Policy Research & Education at Michigan State University, said the current regulatory model works fine at encouraging grid modernization provided regulators ask the right questions.

“When utilities come in for cost recovery,” she said, “regulators should ask, ‘Are you doing this, are you doing that?’ If they’re not doing it, ask them why. The job of the regulator is to compel them to answer some tough questions. The regulator is substituting for the competitive marketplace.”

As complex technologies enter the picture at a rapid rate, she said, they “can be really challenging to understand. Maybe we need to build regulatory capacity.”

When it comes to overhauling the electrical system, regulators “are a big factor,” said Delurey. “The ball is in their court, and they’re the ones who can speed things up, slow things down, or divert them one way or the other.”

]]>Proposals could make it easier for farmers to profit from manure bioenergyhttp://midwestenergynews.com/2017/05/26/proposals-could-make-it-easier-for-farmers-to-profit-from-manure-bioenergy/
Fri, 26 May 2017 11:00:00 +0000https://midwestenergynews.com/?p=400115A pair of federal efforts could make it more profitable to turn organic waste from agriculture and other sources into energy by taking advantage of the Renewable Fuel Standard.

One is a bill recently introduced in the U.S. Senate that would create a 30 percent investment tax credit for qualifying biogas and nutrient-recovery systems. That would put renewable compressed natural gas on a similar footing with solar and wind energy.

A separate approach, currently before the Environmental Protection Agency, aims to create a pathway that would pay biogas producers for providing power for electric vehicles.

An energy consultant from Des Moines is one of several people in the U.S. trying to devise a record-keeping system that ultimately would pay biogas producers much more than they now earn for generating electricity.

Impact of cheap natural gas

The U.S., and the Midwest in particular, has an abundance of energy-containing biomass – whether generated by farms or food processors, landfills or wastewater-treatment plants. The American Biogas Council estimates that there’s enough organic waste to produce the power used by 7.5 million American homes and to reduce emissions equivalent to those generated by 15.4 million passenger vehicles.

But the marketing options at present are limited. Farms and businesses and municipalities across the Midwest are using anaerobic digesters to extract methane from organic waste, which can power on-site generators for electricity. Many of them sell some of the power to their local utility.

Iowa farmer Bryan Sievers sells manure-derived electricity from his cattle operation to Alliant Energy, his local utility. But his power purchase agreement with Alliant will expire soon, and he is pretty sure that the price per kilowatt hour will fall substantially, a consequence of the tumbling price of natural gas.

That has happened to many dairy farmers in Wisconsin, and a number of them now are considering closing down their digesters.

Patrick Serfass, executive director of the American Biogas Council, believes that a tax credit on the costly equipment required to turn manure into high-quality transportation fuel instead would be “a game changer.”

He said that many biogas producers are eager to purchase the equipment to get into that business because of the escalating prices for the associated environmental credits – or renewable identification numbers (RINs). RINs generated along with fuel from cellulosic sources, such as manure and sewage sludge, fetch a particularly high price currently.

“It’s what our members want to talk to us about,” he said. “It’s, ‘How can I use the Renewable Fuel Standard?’ ”

The fuel itself sells for about $3 per million BTUs, he said. But as a result of the federal Renewable Fuel Standard, he claims that the RINs that are generated along with the fuel now sell for as much as $30 or $40 per million BTUs.

The enticing prices notwithstanding, Sievers said that the upfront cost of creating a small refinery at his cattle operation is daunting, and he’s been unable to see any way forward.

“I can’t get a contract with anyone until I produce gas,” he said. “I can’t produce gas until I have financing; and I can’t get financing until I have a contract to sell the gas.”

However, he thinks the proposed tax credit would lower the cost to the point that he could convince a banker to fund the project, and that “might be the tipping point for us.”

The bill also would cover equipment used to extract phosphorus and nitrogen from manure, a process that would keep polluting nutrients out of streams and lakes. Serfass said that pollution-induced algae blooms abound in Republican as well as Democratic regions, and have drawn concern from legislators from both parties.

Although he doesn’t expect this bill to pass on its own, Serfass said he’s hoping to get it incorporated into a larger tax bill.

Credit for electric vehicles

Another “active topic of conversation,” according to Serfass, is how to create a pathway whereby the power produced from organic waste would be credited with charging electric vehicles.

It’s primarily a record-keeping challenge, one that Jeff Hove has been working on.

He’s a consultant in the Des Moines area who is focused on clean-energy credits and, particularly, devising a system to prove that electricity from organic sources is, in effect, providing the energy to power the growing number of electric vehicles.

In theory, electricity from organic waste qualifies under the Renewable Fuel Standard. The trick, Hove said, is to document that electricity from a renewable source is being used as transportation fuel. If and when the EPA accepts someone’s documentation, according to Hove, it probably will mean that digester-owners can earn an extra 10 cents per kilowatt hour over what they typically are paid now by their utilities.

However, it’s the devilish details that have so far gotten in the way.

“The rules already say you can do this … and we’ve got everything in place,” Hove said. “We just need for the EPA to say yes.” The agency collected comments on the accounting systems that have been proposed by Hove and others. He said the EPA is likely to make a decision sometime this year.

Hove has designed a record-keeping system whereby he matches the amount of electricity used to power EVs with the electricity produced by anaerobic digesters, primarily in Wisconsin and Iowa.

If his design – or another similar one – passes muster with the EPA, he said, “It’s going to be very advantageous to the agriculture industry.” A federal tax credit for power produced from organic waste expired at the end of 2016, leaving owners of digesters with no renewable incentives at all.

Serfass, from the biogas council, said that there’s more than one viable strategy for exploiting the energy potential in organic waste.

“We want options,” he said. “The more options you have, the more likely it is that you can deal with your organic waste locally.”

]]>New electricity rate in Missouri expected to benefit efficiency and renewableshttp://midwestenergynews.com/2017/05/19/new-electricity-rate-in-missouri-expected-to-benefit-efficiency-and-renewables/
Fri, 19 May 2017 11:00:00 +0000https://midwestenergynews.com/?p=393342A key step to saving energy, efficiency advocates say, is to reward customers for using less by offering them a lower rate.

Earlier this month, the Missouri Public Service Commission ordered Kansas City Power & Light to begin using an “inclining block” rate system starting on May 28 — tying the rate customers pay for electricity to their overall usage. The two-tiered policy essentially provides a small savings for modest use of energy and imposes a small penalty on customers who use larger amounts.

The rate structure, versions of which are in use by utilities in Minnesota, Colorado and other states, is also likely to improve the economics of efficiency upgrades and renewable energy, according to one clean-energy promoter.

“We think this is a good first victory,” said Andrew Linhares, an attorney with Renew Missouri. “We presented expert testimony and made our case, and the company did as well. We think this is a really encouraging sign that the commission is into sound rate policy.”

Linhares indicated that Renew Missouri and the Sierra Club, which partnered in bringing the issue up in the rate case, will likely seek to further modify the new rate structure in future rate hearings.

The new rate structure will be in effect only from June through September, setting the per-kilowatt-hour charge at 12.9 cents for each of the first 600 kilowatt hours per month, and 14.9 cents for each kilowatt hour beyond that threshold.

Although the price differential is fairly modest, it signals a broader shift in the approach to ratemaking, away from a flat or declining-block rate system that encourages — or at least does not discourage — consumption, and towards a system that rewards conservation. The rate schedule in effect during the eight cooler months of the year remains mostly intact, with three different rates that fall as consumption increases.

Because the first 600 monthly kilowatt hours will become slightly cheaper – by about $3 a month – Linhares said that the new system will have the effect of boosting the economics of both rooftop solar arrays and investment in greater energy efficiency. Payback times for those investments will be shorter than they are now, he predicted.

Linhares called the initial differential “slight,” and said that it likely would reduce consumption by about .1 percent. A larger differential, of course, likely would lead to a greater reduction.

“We would hope to see that ramp up over coming rate cases,” Linhares said.

KCP&L, in an emailed statement, indicated there might be some resistance from utilities.

“While we appreciate the Commission’s perspective on block rates and the view that it might encourage additional utilization of our energy efficiency programs, we believe a block rate structure penalizes customers who choose to use more energy to appropriately meet their individual heating or cooling comfort levels.”

Other states have adopted the inclining-block approach to rates, some in the last couple years, others decades ago. Overall energy consumption tends to fall as a result, said Jim Lazar, a senior advisor at the Regulatory Assistance Project, a non-profit with a clean-energy mission.

In a calculation he did for a 2013 publication, Lazar studied the experience of a municipal utility in southern California that replaced its flat rate with inclining blocks: 7 cents per kilowatt hour for the first 500 kilowatt hours, 10 cents for each of the next 500 kilowatt hours, and 14 cents for any kilowatt hour thereafter.

Customers whose consumption remained within the lowest block actually used slightly more energy after the lower bottom-rate went into effect. The two groups that were subjected to the higher rates cut back on their use. Several years into the new rate system, after customers had had time to change their habits and to invest in more-efficient technology, Lazar wrote that overall energy use had fallen by 8.6 percent.

Xcel Energy instituted inclining block rates for its 1.1 million Colorado customers in 2010. Initially, the rate for each of the first 500 kilowatt hours was 4.6 cents. Beyond that threshold, the rate nearly doubled to 9 cents.

Those rates have risen a bit, to 5.5 cents and 9.9 cents per kilowatt hour making the differential a bit less, but still substantial. The tiered rate structure seems to have had a significant impact on electricity use. Xcel spokesman Mark Stutz said consumption dropped in each of the first four summers when the rate was in effect, by 2.2 percent during the summer of 2010 to 4.5 percent in the summer of 2013.

Minnesota Power instituted a three-block rate structure about 30 years ago, then modified it to a five-block system in 2009, and now is looking to simplify matters by telescoping the five into two blocks. The utility analyzed the results in 2013 through 2015, and concluded that energy use had in fact declined, but a spokeswoman said it wasn’t clear whether it was due to declining-block rates or some other factor.

In Missouri, Linhares said that Missouri’s major utilities have looked at various rate structures as part of their integrated resource plans and energy-efficiency potential studies.

“They show huge potential savings,” he said. “We can spend a million on energy efficiency to capture 1 percent annual savings per year, but we can also do these very, very cheap changes in rate design to achieve big energy savings.”